Mitt Romney on Budget & Economy

Former Republican Governor (MA); presidential nominee-apparent

We have a choice of two paths: Obama or prosperity

I'm optimistic about the future. I'm excited about our prospects as a nation. I want to see peace. I want to see growing peace in this country, it's our objective. We have an opportunity to have real leadership. America's going to have that kind of
leadership and continue to promote principles of peace that'll make a world the safer place and make people in this country more confident that their future is secure.

I also want to make sure that we get this economy going. And there are two very
different paths the country can take. One is a path represented by the president, which, at the end of four years, would mean we'd have $20 trillion in debt, heading towards Greece. I'll get us on track to a balanced budget. The president's path means
20 million people out of work struggling for a good job. I'll get people back to work with 12 million new jobs. I'm going to make sure that we get people off of food stamps not by cutting the program but by getting them good jobs.

My five-point plan will get this economy going again

We can get this economy going again. My five-point plan does it. Energy independence for North America in five years. Opening up more trade, particularly in Latin America. Cracking down on China when they cheat. Getting us to a balanced budget.
Fixing our training programs for our workers. And finally, championing small business. I want to make small businesses grow and thrive. I know how to make that happen. I spent my life in the private sector. I know why jobs come and why they go.

Source: Second Obama-Romney 2012 debate
, Oct 16, 2012

Economy Tax: Middle-income families have lost $4,300

The people who are having the hard time right now are middle-income Americans. Under the president's policies, middle-income Americans have been buried. They're just being crushed. Middle-income Americans have seen their income come down by $4,300.
This is a tax in and of itself. I'll call it the economy tax. It's been crushing.

At the same time, gasoline prices have doubled under the president. Electric rates are up. Food prices are up. Health care costs have gone up by $2,500 a family.
Middle-income families are being crushed.

And so the question is how to get them going again. And I've described it. It's energy and trade, the right kind of training programs, balancing our budget and helping small business.
Those are the cornerstones of my plan.

And finally, with regards to that tax cut, look, I'm not looking to cut massive taxes and to reduce the revenues going to the government.

Fannie Mae and Freddie Mac were source of housing bubble

Q: Would you phase out Fannie Mae and Freddie Mac? Does the private mortgage industry need additional regulation?

ROMNEY: Well, I think you know that Fannie Mae and Freddie Mac were a big part of why we have the housing crisis in the nation that we
have. Speaker Gingrich was hired by Freddie Mac to promote them, to influence other people throughout Washington, encouraging them not to dismantle these two entities. I think that was an enormous mistake. I think, instead, we should have had a
whistle-blower and not horn-tooter. He should have stood up and said, look, these things are a disaster; this is a crisis. He should have been anxiously telling the American people that these entities were causing a housing bubble that would cause a
collapse that we've seen around the country. And are they a problem today? Absolutely. They're offering mortgages, again to people who can't possibly repay them. We're creating another housing bubble, which will hurt the American people.

America needs less spending and more jobs

When the president delivered the annual State of the Union address, Romney was primed to respond. Obama "is trying awful hard," he told the receptive Fox TV audience. "The problem is, he just doesn't know what to do. He is misguided, almost everything
he's done has been the opposite of what he hoped to accomplish. And last night, he needed to speak to two very big concerns that are on the minds of a lot of Americans. One is, is he going to get more jobs in this country? And the second is, can he cut
back on the extraordinary overspending and deficits associated with government?

"And frankly, he didn't address those issues in a way that convinced people. Almost everything he has done in his first two years has made it more difficult for our
economy to grow. It's been the most anti-investment, anti-jobs, anti-growth administration we've seen in a long, long time. I'm inclined to make sure there is somebody in the race that really understands how the economy works and can get jobs back."

We need president who understands how economy works

Q: You originally called the "Occupy Wall Street" protests "dangerous." You said it was class warfare. You recently sounded more sympathetic. Where do you stand now?

ROMNEY: Look, we can spend our time talking about what happened three years ago and
what the cause was of our collapse. But let's talk about what's happened over the last three years. We've had a president responsible for this economy for the last three years, and he's failed us. He's failed us in part because he has no idea how the
private sector works or how to create jobs. On every single issue, he's made it harder for our economy to reboot. And as a result, we have 25 million Americans out of work. I can tell you that this is time to have someone who understands how the economy
works, who can get America working again. Instead of dividing and blaming, as this president is, let's grow America again and have jobs that are the envy of the world. And I know how to do it.

Cap how much government can spend as a percentage of GDP

If you go back a few years to JFK's time, the government at all levels--federal, state and local--was consuming about 27% of the US. economy. Today it consumes about 37% of the US economy. It's on track to get to 40%. We cease at some point to be a free
economy. And the idea of saying, we just want a little more, just give us some more tax revenue, we need that, that is the answer for America. The answer is to cut federal spending. The answer is to cap how much the federal government can spend as a
percentage of our economy and have a balanced budget amendment. And the second part of the answer is to get our economy to grow, because the idea of just cutting and cutting and taxing more--I understand mathematically those things work, but nothing
works as well as getting the economy going. Get Americans back to work. Get them paying taxes. Get corporations growing in America. And I'll tell you, these kinds of problems will disappear.

Obama economy hurt middle class the most, so help them first

CAIN: [to Romney] : My 9-9-9 plan starts with throwing out the current tax code and pass 9% business flat tax, 9% personal income tax, and the 9% national sales tax.
It eliminates or replaces the corporate income tax, personal income tax, capital gains tax as well as the estate tax. And unlike Gov. Romney's plan my plan throws out the old one. He's still hooked to the current tax code. That dog won't hunt.

ROMNEY: My intent is to help the people who have been most hurt by President Obama's economy. And the people who have been most hurt are the middle income families of America. And that's why my plan says that if middle income families want to save their
money, anybody earning under $200,000 and not pay any taxes on interest, dividends or capital gains, zero tax on their savings, that's the plan I'm for. And I will get that done in my first year.

Can't balance budget by cutting waste; must cut spending too

PERRY: [to Romney]: How do you find the savings and still deliver the services? For instance, in Texas, we put an Office of Inspector General into place, and we saved over $5.3 billion.

ROMNEY: The key to balancing the budget--having spent 25 years in
business, I know something about taking waste out of enterprises--I'd love to do that to the federal government. And there is massive waste. But we're not going to balance the budget just by pretending that all we have to do is take out the
We're going to have to cut spending. And I'm in favor of cutting spending, capping federal spending as a percentage of GDP, at 20 percent or less, and having a balanced budget amendment. That's essential to rein in the scale of the federal government.
And there's a second part to balancing the budget, and that's growing the economy again. The right answer for America is to stop the growth of the federal government and to start the growth of the private sector.

The country needs a turnaround, and that's what I do

Q: [to Romney] Does Gov. Perry deserve any credit for all those jobs created in Texas?

ROMNEY: Oh, sure. And I'll tell you, if you think that the country is, like Texas, going swimmingly well, then somebody who has done that is just terrific.
But if you think the country needs a turnaround, that's what I do. If we're going to get this economy going, we've got to do seven things:

Make our tax code competitive with the world

Get regulations to work to encourage enterprise

Have trade policies that work for us not just for the other guys

Have energy security in this country by developing our energy resources

Execute the rule of law to stop the Boeing decision that the NLRB put in place

Make sure that we have institutions that create fantastic human capital

Balance the budget. People won't invest here unless they have confidence here. And that's what I'll do.

Better that The Fed manages currency than Congress

BACHMANN: [to Romney] The Federal Reserve has a lot to answer for. That's why it's important that they're not only audited, but they have got be shrunk back down.

ROMNEY: The Federal Reserve has a responsibility to preserve the value of our currency,
to have a strong American currency, such that investors and people who are thinking about bringing enterprises to this country have confidence in the future of America and in our currency. People will not invest in this country and create jobs in this
country for the American people if they don't have belief in our currency. Of course we should see what the Fed is doing. There should be some oversight to make sure that it's acting properly. But at the same time, we recognize that we need to have a Fed
Why do I say that? Because if we don't have a Fed, who's going to run the currency? Congress? I'm not in favor of that. I'd rather have an agency that is being overseen rather than have the United States Congress try and manage our currency.

I understand how the economy works because I lived in it

Q: Despite your own private-sector experience, as you know, Massachusetts ranked only 47th in job creation during your tenure as governor.

A: I'm happy to take a look at the Massachusetts record, because when I came in as governor, we were in a real
freefall. We were losing jobs every month. We had a budget that was way out of balance. We were able to turn around the job losses. At the end of four years, we had our unemployment rate down to 4.7%. The policies that will get us working again as a
nation are policies I understand having worked in the private sector. Look, if I had spent my whole life in government, I wouldn't be running for president right now. My experience, having started enterprises, having helped other enterprises grow and
thrive, is what gives me the experience to put together a plan to help restructure the basis of America's economic foundation so we can create jobs again. Our president doesn't understand how the economy works. I do, because I've lived in it.

Let middle-income Americans save money tax-free

I don't want to raise taxes on the American people, but I think everybody ought to feel that they're part of this effort and that they're providing for our military, providing for our roads, providing for our schools. That ought to be part of what every
American experiences.

The question is not the people that are not paying taxes at the low end. The question is not the people who are very, very rich. The question is, how about middle-income Americans?

Who are the people most hurt by the
Obama economy? And the answer is the middle class. The great majority of Americans are having a very, very difficult time. And our effort has to be to find ways to reduce to burden on those people.

And that's why I've proposed that anybody who's earnin
$200,000 a year and less ought to be able to save their money tax-free, no tax on interest, dividends, or capital gains. Let people save their money, invest in America, and not have to give more money to the government. The middle class needs our help.

7 principles for leadership on the economy

Q: How long would it take you to turn around the economy?

A: I'm not going to give you an exact time-frame, but I can tell you this, that if you spend your life in the private sector, you understand that what Pres. Obama has done is the exact opposite
of what the economy needed to be done. There are really seven things that need to be done:

Make sure our corporate tax rates are competitive with other nations

Make sure that our regulations and bureaucracy works not just for the bureaucrats in
Washington, but for the businesses that are trying to grow

Have trade policies that work for us, not just for our opponents

Have an energy policy that gets us energy secure

Have the rule of law

Great institutions that build human capital, because capitalism is also about people, not just capital and physical goods

Have a government that doesn't spend more money than it takes in. And I'll do it.

Don't ask "what can we cut" but "what should we keep"

Q: You've been a chief executive of a state. I was just in communities dealing with tornadoes & flooding. FEMA is about to run out of money, and some people say, maybe we're learning a lesson here that the states should take on more of this role?

A:
Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further and send it back to the private sector, that's even better.

Instead of thinking in the federal budget, what we should cut--we should ask ourselves the opposite question. What should we keep? We should take all of what we're doing at the federal level and say, what are the things we're doing that we don't have
to do? And those things we've got to stop doing, because we're borrowing $1.6 trillion more this year than we're taking in.

Q: Including disaster relief?

ROMNEY: We cannot afford to do those things without jeopardizing the future for our kids.

Our lack of vision led to financial collapse & loss of $12T

I'm reminded of the words from Proverbs, "Where there is no vision, the people perish." If a nation simply doesn't SEE a threat, it is unlikely to do something about it.

Our own lack of vision led to the collapse of our financial markets and our
economy. It precipitated a global recession, triggered the loss of $12 trillion of our citizens' net worth, and dealt a sharp blow to world freedom. We simply did not see that so-called subprime home mortgages, liar loans, and nonqualified loans had
the potential to cause such destruction.

There may be a dangerous strain of self-interest among the citizenry in democracies as well. If citizens in a democracy foster short-term self-interest rather than promoting the long-term
interest of the nation--placing themselves above their descendants--there is little likelihood that they will vote for visionary transformative leaders who advocate difficult change and sacrifice.

Strong economy makes superior defense AND citizen prosperity

Americans can only be as secure over the long term as our economy is strong. An inferior economy cannot indefinitely support a superior defense. Mathematically, the scale of our military can be no longer larger than the product of our total economy--the
GDP--and the percentage of that economy that is spent on defense. And the size of our economy is a function of the number of people in the workforce and the PRODUCTIVITY of that workforce.

As virtually every American discovered beginning in fall of
2008, a strong economy is also the foundation of our citizens' prosperity: Americans have experienced the impact of a weakened economy. But beyond the lows of recession and the highs of expansion, the sustained wealth of our families and communities is
also driven by workforce productivity.

Whether you are interested in spending more on benefits or you want to add to defense, achieving your objectives depends on the nation's productivity.

This recession has cost $12 trillion in net worth

We're in the second year of a major recession, and if we don't make the right choices, things could get worse. Americans have already lost some $12 trillion in net worth. And the pool of our nation's investment capital has also shrunk by trillions of
dollars.

The President has already moved to stop our economy's downward spiral. Parts of the stimulus will, in fact, do some good. But too much of the bill was short-sighted and wasteful. Every single Republican in Congress voted in favor of a better
stimulus plan, one that focused on creating jobs immediately. But Congressional Democrats couldn't restrain themselves from larding up their bill with tens of billions of dollars for their political friends. Republicans wanted to stimulate the economy,
Democrats wanted to stimulate the government. Conservatives in the House and Senate stood their ground and voted no--and they were absolutely right.

Apply Reaganomics to current recession: cut taxes & grow

Q: What is the biggest difference between you and John McCain when it comes to the economy? A lot of fear right now of recession. People are hurting. What’s the biggest difference between your strategy and his?

A: Well, the list is very long. The last
time we had a recession, President Bush recognized the best thing you can do is lower taxes and put forward a tax bill. And John McCain was one of only two Republicans to vote against it. He does not understand the first lesson of Reaganomics, which is,
you cut taxes to grow the economy.

Q: What would you do differently than the president would do?

A: There are two things that I’d add to the legislation that relate to long-term growth incentives. One is to say to people who are making under
$200,000 a year, they ought to be able to save their money, tax-free, no tax on interest, dividends or capital gains. And secondly, for people 65 years of age & older, my view is that they should not have to have payroll taxes taken out of their incomes.

Make sure that we rein in spending

We’re going to have to make sure that we rein in spending. It’s not just we all agree on the earmarks & the pork barrel spending & the “Bridge to Nowhere.” But the big one is entitlements & reining in entitlement costs, and that’s where the big dollars
are. What you’re seeing in a weakening dollar, in a declining stock market, in foreign countries coming here to buy into our banks, you’re seeing the foundation of our economy being shaken by that we haven’t been doing the job that needs to be done.

Source: 2008 GOP debate in Boca Raton Florida
, Jan 24, 2008

Support some kind of national catastrophic fund

I do support some kind of national catastrophic effort to make sure that people can get homeowner’s insurance that protects them against flood or hurricane or tornado or whatever natural disaster might occur, or man-made disaster in some cases. People wh
live along the coastline across the Atlantic have the same problem. Getting homeowner’s insurance is oftentimes almost impossible. So what we’re going to have to do, as you just indicated, we’re going to have to work together to create a program that get
people in high-risk areas insured. Now, I’m not in favor of saying that the people in Iowa should have to subsidize the people in Massachusetts or Florida--that doesn’t make a lot of sense--but to have those states that are in high-risk areas come
together and say, “How do we organize an effort on a national basis that actuarially deals with the differences between different states and the different risks they face and make sure that we have a backstop behind the private insurance industry?”

Only someone who worked in private sector can fix economy

Q: Tell us why voters should support you over Rudy Giuliani.

A: Mayor Giuliani is a wonderful fellow. But he’s spent his life working in the governmental sector. I spent my life working in the private sector. And when it comes to trying to help see
jobs come back, see our economy stronger, voters are going to want somebody who really understands how the economy works, and someone who has run something and someone who can, from the outside, finally get inside Washington and turn the place inside out

Q: Tell us why voters should support you over John McCain.

A: Sen. McCain is an honorable and courageous individual. But he has been in Washington all of his career. And I don’t think you’re going to see change in Washington by somebody who’s
been such a part of it all of these years. I think people recognize that it’s essential to have somebody who’s had a job in the economy, who knows how the economy works and can fight to bring good jobs for middle-income Americans.

Economic strength comes from people, not from Washington

Q: Does our country’s financial situation creates a security risk?

A: This is, indeed, a time of extraordinary challenges in this country, and the overspending in Washington and the overpromises that we’ve made are certainly among those challenges.
But this is not a time for us to wring our hands and think that the future is bleak. In fact, the future is bright. We need leadership to rein in excessive spending, and to help America grow. The best answer for our economic woes is to make sure we have
good jobs for our citizens, good schools for our kids, good health care for everyone, and that we have policies that promote the growth of the nation. We can have a level playing field around the world, get ourselves off of foreign oil, reduce the
excessive spending in Washington, and have a bright future for our kids. This is based upon the strength of the American people. If you want to see a strong America, you don’t look to Washington; you look to ways to strengthen the American people.

Cut deficit via waste, like 342 different economic programs

Q: Are there programs that are so important that you’d be willing to run a deficit to pay for them?

A: Well, we don’t have to run a deficit to pay for the things that are most important because we can eliminate the things that aren’t critical.
We have, in the federal government, 342 different economic development programs, often administered by different departments. We don’t need 342. We probably need a lot fewer than 100 of those. We have 40 different programs for workforce training.
There are probably 5 or 6 that are really working. We can get rid of some of those. And so what anyone in the private sector’s learned how to do is to focus their resources on those things that have the biggest impact, that are most important.
Surely, protecting our country and our defense of our military is critical [as are healthcare and schools]. And the sacrifice we need from the American people, it’s this: it’s saying let the programs that don’t work go. Don’t lobby for them forever.

Fundamentally change how Washington works, to reduce pork

Q: What would you do to the pork spending?

A: Every bill that comes forward that’s got pork in it and earmarks that are unnecessary, we’ve got to veto them and send them back. But it’s got to be broader than that.
We’re going to have to see fundamental changes in the way Washington works. We’re just not going to get out-of-the-box thinking with inside-the-Beltway politics.

Washington is broken; needs fundamental change

As you look at what’s happening in the federal government, [key is to consider] that Washington is broken. We need to have fundamental change in the way business in Washington is carried out. What that means is we’re going to have to have leadership that
can reorganize the government. We’re going to have about 40% of the government employees turn over in the next couple of terms. Let’s go through all the agencies, all the departments, all the programs and cut out the unnecessary and the wasteful.

Source: 2007 Republican Debate in South Carolina
, May 15, 2007

Balance state budget by removing waste and folderol

Romney vowed not to support a freeze or reversal of the plan to roll income taxes back to 5 percent by next year even in the face of a budget hole nearing $3 billion. “The easy way to fix any problem is to go to the people and say you have to pay more
money, but that’s not what the job of management is,” Romney said. “The job of management is to find ways to permanently and structurally change the costs of our structure such that we can have a balanced budget without always raising taxes every time
people think there’s a need.“

Romney, CEO of the Salt Lake Olympic games, said his experience in Utah taught him waste can be found & rooted out. ”We took things out that were waste, that were unnecessary, the folderol that wasn’t essential to carrying
out the mission of a great Olympics,“ Romney said. ”The same thing, I believe, can happen in government.“

Democrats running for governor noted that Romney’s Olympics relied heavily on government subsidy, pulling as much as $1.5 billion from taxpayers.

Source: David Guarino, Boston Herald
, Mar 22, 2002

Mitt Romney on Bailout + Stimulus

Stimulus package declares war on free enterprise

Romney once told Fox News's Bill O'Reilly that President Obama was "right to try and push a stimulus plan." In the hardback version of his 2009 book "No Apology," Romney again expressed support for the economic concept behind the stimulus, even if he
disagreed with Obama on the details of how much money should be spent and how it should be allocated. Despite these differences, Romney predicted that Obama's stimulus would "accelerate the timing of the start of the recovery, but not as much as it
could have."

As the debate turned more partisan, Romney's tone changed. Before "No Apology" was released in paperback, he revised the text and turned up the political rhetoric: "This is the first time government has declared war on free enterprise."
His campaign team acted as if there had been no change at all, that this had been Romney's position all along. Said a spokesman: "A lot has occurred over the last two years."

Obama's policies made economy & stock market worse

In June 2011, Romney claimed that the economy had gotten worse under Obama. A reporter questioned him: "But the stock market was tumbling, and is now above 12,000." Romney replied: "I didn't say that things are worse. What I've said is, the economy
hasn't turned around."

Reporters pointed to a pile of stories throughout 2011 of Romney telling audiences across the US that the economy had gotten much worse under Obama. In February in New Hampshire he claimed, "Obama had inherited a bad economy
and promptly made it worse." The rhetoric survived into the Republican debate in New Hampshire when he said President Obama "didn't create the recession, but he made it worse and longer." When pressed for an explanation, Romney's campaign tried to
change the subject, arguing that the candidate's response had been to a "reporter's comment about the stock market," and that it is "an undeniable fact that Barack Obama has failed to create jobs and fix the economy."

Let foreclosures happen; let the market reboot

Q: [to Gingrich]; Gov. Romney has said that the government should let the foreclosure process play out so that the housing market can recover and the free markets can work. Is he right?

GINGRICH: He's certainly right that you want to get to the real
value of the houses as fast as you can. But in the long run, you want the housing market to come back? The economy has to come back.

: [to Romney]: Not one of your 59 points in your economic plan mentions or addresses housing. Can you tell us why?

ROMNEY: Yes, because it's not a housing plan. It's a jobs plan. The best thing you can do for housing is to get the economy going, get people working again, seeing incomes coming up so people can afford to buy homes. You have to let the market work
and get people in the homes again, and the best way for that to happen is to allow this economy to reboot. What we know won't work is what this president has done, which is to try and hold off the foreclosure process, the normal market process.

QE2 didn't work; focus on jobs & higher growth

Q: Would Ben Bernanke have a job in your administration?

ROMNEY: No, I'd be looking for somebody new. I think Ben Bernanke has over-inflated the amount of currency that he's created. QE2 did not work.
It did not get Americans back to work. It did not get the economy going again. We're still seeing declining numbers in prior quarter estimates as to what the growth would be. We're growing now at 1% to 1.5%.
The plan I put forward will grow our economy at 4% per year for four years and add 11.5 million jobs. That's a very different approach than Ben Bernanke's taken, and it's a demonstrably different approach than
Barack Obama has taken, and that's in part because we have very different life experiences.

Bailout program wasted money; let companies go bankrupt

Q: GM and Chrysler have rebounded. Would you say the bailout program was a success?

A: The bailout program was not a success because it wasted $17 billion. When the auto company CEOs went to Washington asking for money, I said the right process is not
big check from Washington, but instead letting these enterprises go through bankruptcy, getting rid of the unnecessary costs, and re-emerge on their feet again. Instead, the Bush administration and the Obama administration wrote checks to the auto
industry.

Q: You wrote in Nov. 2008, "If GM, Ford and Chrysler get the bailout, you can kiss the American automotive industry goodbye." Were you wrong?

A: No, I wasn't wrong, because if you read the rest of the op-ed piece, it says they need to shed
unnecessary costs. If they just get federal checks, they're going to be locked in with high UAW legacy costs. They'll never be able to get on their feet. They have to go through bankruptcy. And it turned out that that's finally what they did.

US didn't bail out Wall St.; we prevented financial failure

I understand why so many people were and remain outraged at the emergency measures [in mid-2008]. They are offended by the idea of a bailout, and they don't much like Wall Street, either. The suspicion of bailouts is entirely sound.
It doesn't make sense to bail out individual companies or banks or financial institutions that get in trouble. Creative destruction is part of a growing, productive economy. Subsidizing failure doesn't stop failure--it merely prolongs the final act.

But Secretary Paulson's proposal was not aimed at saving sick Wall Street banks or even at preserving jobs on Wall Street.
It was intended to prevent a run on virtually every bank and financial institution in the country. It did in fact keep our economy from total meltdown.